Caring for Aging Parents
By Robert Spielman, Partner, Tax & Business Services
The cost of caring for our aging parents continues to climb. From the costs of medicine, medical care, to simply providing for their daily needs. As time passes, many older adults find that they can no longer live on their own, or even with an elderly spouse. Many families will consider some sort of assisted living. Assisted living is a recent phenomenon, and can include situations somewhere between an over-55 community and a full service nursing home. The level of services one needs in an assisted living facility dictates placement and price. No matter the initial price, generally, as time goes on, additional demands are placed on the facility and the price just escalates. The prices seem to escalate even when no new demands are made for additional service. The MetLife Mature Market Institute recently reported assisted living costs have climbed 5.2% from 2009 to 2010, outpacing inflation and the interest earned on savings and bonds.
What is the elderly parent and their care-giver family to do? Here are some thoughts:
- Hold off placing the parent in an assisted living facility as long as reasonably possible. Hire an aide, or utilize the benefits provided by Long-Term Care policies that hopefully are already in force. You can monitor the elderly at home with webcam systems and keep them protected with an alert system, such as a pendant, wrist band alert, or a dedicated emergency telephone.
- Utilize visiting nurses or home care aides, where practicable.
- Purchase long-term care insurance as early as possible.
- Apply for Supplemental Security Income as soon as you can. Some facilities will accept these benefits in partial or even full payment.
- Explore charity/non-profit based assisted living facilities, such as those developed by religious organizations or community welfare groups.
- Utilize all available Veteran's benefits. Contact the U.S. Department of Veterans Affairs to see if the parent and/or spouse qualify for benefits.
- Consider a reverse mortgage if there is a family home in which a spouse will continue to reside.
- Borrow from children with repayment to be made from assets remaining on passing.
- Purchase life insurance, where practicable, to provide funds for a surviving spouse or for family who may help fund the current costs of assisted living.
- Consider purchasing annuities for life with guaranteed returns to fund the costs of assisted living.
- Where appropriate, consider asset depletion strategies to eventually utilize state supported facilities.
- Be an active participant in an assisted living facility's provision of care. Monitor the level of care given and the true needs of the patient to avoid unnecessary services that are not required or could be provided at a lower cost.
- Consider participating in the life settlements market for insurance policies on the life of an aging parent.
- Consider purchasing a new life insurance policy with a view towards participating in the life settlement market at a later date.
The needs of assisted living patients can change very quickly, and so will the costs. This is the case, even though the average assisted living stay today is only approximately 28 months. It is important to plan ahead, save for, or insure against these costs. In many cases where the elderly have no choice but to spend through all their remaining assets, they hopefully have been loving and kind to their children so that when they need help, their children will be there for them."